The Quoddy Tides

2007 February 9

Indian Township prepares for LNG vote

by Edward French

The Indian Township tribal government is holding two community meetings this month to explain a proposed tax agreement that the Passamaquoddy Joint Tribal Council is being asked to sign by Quoddy Bay LNG.

The first community meeting was scheduled for Friday, February 9, with the second one not yet scheduled. The meetings are being held in advance of a referendum to be held at Indian Township concerning the proposed liquefied natural gas (LNG) terminal at Split Rock, Pleasant Point. The date of the referendum has not yet been set, but it is to be held before February 28.

The wording of the referendum question has not been decided, but Lt. Gov. Joseph Socobasin believes it will concern whether Indian Township residents are in favor of signing the tax agreement. Socobasin says the referendum will be binding, so if residents do favor signing the agreement, then the Indian Township tribal councilors would do so.

At the suggestion of tribal councillor Ed Bassett, the Sipayik Tribal Council voted last month to offer Indian Township about 40% of the profits from a land lease with Quoddy Bay LNG, estimated to be about $12 million a year once the proposed LNG terminal is operational, if the Indian Township councilors sign the tax agreement. Pleasant Point Chief Richard Doyle is concerned that the profit-sharing agreement is not covered by a negotiated, formal document and that Indian Township would be sharing in the profits but not the risks posed by the LNG terminal.

Last February, the joint tribal council had voted to turn down the tax agreement, with all of the Indian Township councilors voting against it. The proposed agreement calls for the exemption of real and personal property taxes and the reduction of the Tribal Employment Right Ordinance (TERO) tax for Quoddy Bay LNG.

Because the tax agreement has not been signed, Quoddy Bay LNG has not paid lease fees to Pleasant Point, which amount to about $500,000 this past year. Doyle says that the tribe is being required by Quoddy Bay LNG to meet certain thresholds of the contract — the signing of the tax agreement by the joint tribal council — or it will not receive any benefits. He believes that, if the threshold is not met, then the contract should cease for both the tribe and the company.